You’ve likely heard that 80% of New Year’s resolutions fail by February 1st.
And some studies have even shown that less than 10% of individuals will have achieved their New Year’s goals by year-end.
So then, what’s the point, right?
Why do so many of us go through the trouble of setting goals if there’s a low chance of achieving our desired outcomes in the end?
Well, it’s likely because we all know that goal setting allows us to create a structure for the things we’re trying to accomplish, gives us a sense of control, and orients our mind away from the past and towards the future.
To be sure, deep down, many of us want to experience a new and improved version of ourselves in one form or another. And so, milestones, like the changing of a new year, is a perfect time to try to give it a shot.
New year, new you, right?
It’s just like Wayne Gretzky once said, “You miss 100% of the shots you don’t take.”
So then, how can you improve the odds in your favor and make lasting changes in the coming year?
Well, you can do so by creating resolutions anchored to your broader life purpose, focusing on actions that reflect your values, and developing resilience to meet setbacks head-on.
Sounds simple, right?
Simple, yes, but the truth is that by aligning your financial strategy with what truly matters to you, you’ll create meaningful financial resolutions and likely be able to see them through to the end of the year.
Purpose-Driven Finances: Aligning Goals with Your Life’s ‘Why'”
Alright, so one of the first steps to creating financial resolutions that last throughout the course of the year is to give your money purpose.
And what exactly do we mean here by purpose?
Well, you can think of purpose as sort of your bigger “why” for existence.
That’s because identifying your purpose is about answering that bigger proverbial question, “what’s this life all about?”
That’s pretty deep, right?
Defining Your Financial Purpose: More Than Just Numbers
Well, the truth is that you don’t need to fully understand what you were put on this planet to do to be able to identify your purpose for the year ahead.
You can start by considering something as simple as your anticipated lifestyle, career, and family changes and how you’d want to use your money to support the things you want to accomplish in the coming year.
Indeed, financial goals with a deeper purpose are more compelling and sustainable.
That’s why aligning financial resolutions with your life’s purpose can lead to more fulfilling outcomes and help you develop a sense of achievement beyond financial success.
And so, how do you go about doing this work?
Reflecting on the Past, Planning for the Future
Well, you can start by reflecting on the past year’s financial decisions and how they’ve contributed to or detracted from your life’s purpose.
Then, think of some things that you’d like to have done differently, improved, or changed, and jot these down on a piece of paper or in the notes on your phone.
Then, on another piece of paper, draw out two columns. In the first column, write down the top three priorities in your life that you’d like to see take center stage in the year ahead.
This could be spending less time at work, and more time with family, taking better care of your health, or engaging with your community. The key here is that your purpose is about identifying what you’d like to see happen in your life and who you need to become in order to make that happen.
Now, in the second column, write out your top three financial goals for the year. In this column, you could be thinking of things like spending more prudently, saving more effectively, or investing more wisely.
Now, consider what you plan to get done financially in the year ahead and think about how it aligns with your personal purpose.
In other words, how do the things that you want to accomplish align with the plans that you have for your life in the coming year?
If you can’t find ways to connect the dots between the two, then you might have a purpose alignment issue, which could derail your financial goals from the start.
So then, take the time to consider the path ahead and what you’d like to see get done. Then bring in the money discussion to support that end.
Trying to do it the other way around could lead to disappointment at best, and failed goals at worst when you’re spending or saving in a way that does not reflect who you want to become.
Values at the Forefront: Crafting Financial Goals That Reflect You
Alright, so now that you have a better idea of how to align your money goals with your purpose, the next thing you’ll want to do to ensure that your financial goals for the coming year stay on track is to ensure that they align with your values.
Now, values, in this context, refer to the core principles and beliefs that guide your life. They are like your internal compass, directing your day-to-day decisions and actions.
In other words, if your purpose defines the road between where you are now and where you plan to go, then values determine how you’ll behave along the way to avoid falling into a ditch.
Identifying Core Values: The Heart of Your Financial Decisions
And so, how does this work?
Well, if your purpose is to better support your family, then your family-oriented values might suggest that your financial goals include saving for a family vacation or setting up a college fund for your children.
On the other hand, if you’ve identified community as your purpose and environmental conservation is close to your heart, you might prioritize sustainable investments or reduce consumption to save money and resources.
Aligning Spending with Beliefs: A Path to Financial Integrity
To be sure, these values act as a filter through which you view your financial choices.
So then, by identifying what truly matters to you, your financial resolutions become more than just numbers or targets, they become reflections of who you are and what you aspire to contribute to the world.
So then, as you set your financial New Year’s resolutions, take a moment to reflect on what’s genuinely important to you and let these values guide your decisions.
And so, how do you go about doing this work?
Well, the first thing to do here is to take a step back and evaluate your current financial situation to see if your daily, weekly or monthly choices align with who you want to become.
You can do this by asking yourself, “Based on my purpose for the year ahead, which of my spending or savings habits are in sync with my core values, and which of them are not?”
Then, create a list of values that reflect your purpose for the coming year, along with a list of common financial choices you make on a regular basis.
For those behaviors that align with your values and purpose, consider giving more energy to these efforts.
And to those behaviors you’ve identified that don’t align with your values, consider whether they’re still necessary and consider strategies to avoid derailing your financial goals in the year ahead.
Navigating Life’s Changes: Adapting Financial Plans for Real-World Challenges
Alright, so now that we’ve talked about how understanding your purpose can help you set the course for your goals, and how knowing your values serves as the barometer for day-to-day decisions, let’s talk about things you can do to stay the course on your financial goals even when life throws you curve balls.
Now, looking down the road to the year ahead, it’s inevitable that life’s demands will evolve, and so your financial strategy should as well.
Indeed, life is always changing, and so the way that you manage your financial goals should be flexible and adaptable. Think of it like steering a ship. You have your destination (your goals) in mind, but you need to adjust your course as the sea changes.
Embracing Flexibility: When Life Takes an Unexpected Turn
And so, why is this flexibility so important?
Well, as life throws different situations at you, like changes at work, a growing family, or unexpected expenses, your financial needs and abilities need to change too.
That’s why sticking rigidly to an old plan will not only not work but will likely guarantee that your goals will be derailed.
And so, what does this adaptability look like?
Well, you might have set a goal to save a certain amount of money, and if you get a raise at work, you now have the ability to save even more. Or, on the other hand, if the coming year brings you a new addition to your family, then you’ll likely need to adjust how much you’re saving and spending to cover new these additional expenses.
In this way, by being willing to adapt your financial strategy, you can make sure it always fits your current situation.
This way, you’re not just blindly following a plan, you’re actively managing your finances in a way that supports your life as it is now, and as it will be in the future.
And how do you go about doing this work?
Creating a Financial Blueprint for Life’s Big Moves
Well, here again consider the purpose that you’ve defined for your life in the coming year.
Again, you can do this by thinking about what’s happening in your life now or what likely changes could be coming down the pike.
This could include moving to a new place, changes in your career or family, or how you care for your mind, body, and how involved you are with your community.
Each of these changes brings different financial needs and different challenges.
For example, let’s say that you’re planning to move to a new city next year. This move isn’t just about packing and finding a new home, it also affects your finances in many different ways.
That’s why you’ll need to think about moving costs, changes in living expenses, and maybe even potential changes in income.
Once you’ve identified this big change, create a plan to handle it financially. For the relocation, you might start saving more each month to simulate your additional living expenses by researching the cost of living in your new chosen city and adjusting your budget accordingly.
And if you’re expecting a salary change like a raise, for example, consider not just how this change might affect your overall saving and spending decisions in the year, but also what you would do if your anticipated raise or bonus failed to come through.
So then, no matter what your situation might be, take some time to ask yourself, “Based on the changes I anticipate, what can I do now to get ahead of and to manage the potential curve balls life might throw me in the year ahead?”
And if you’re not sure what to expect in the year ahead, take some time and reflect on the past year. Think about the financial goals you had set for yourself, and consider specific factors that knocked you off course and whether they’re likely to happen again.
To be sure, this approach ensures your financial strategy supports what’s happening in your life, helping you stay on track with your goals even as things change. It’s about making your money work for you, no matter what life throws your way.
New Year, New You: How to Make Lasting Financial Changes in the Coming Year
When it comes down to it, each new year brings with it an opportunity for a fresh start.
In many ways, it’s one of life’s little chances for a do-over, and an opportunity to finally get things on course the way they should be.
With all that said, even the best-laid plans are doomed to failure if you’re executing on the wrong strategy.
That’s why this year, as you craft your financial resolutions, take a moment to pause and build them from a foundation of deep intention.
You can start by clarifying your purpose, ensuring that your goals are not just empty aspirations but beacons guiding you towards your life’s true direction.
Then, let your values be the yardstick that help you make wise choices.
And even more crucially, develop flexible strategies and have contingency plans ready for those unpredictable moments life invariably presents.
These efforts will not only ensure that you don’t become another statistic in the coming year but will also help you take one step closer to becoming the master of your own financial independence journey.